Tesco 2004 Annual Report Download - page 52

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50 TESCO PLC
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTE 27 Pensions continued
Major assumptions
The major assumptions, on a weighted average basis, used by the actuaries were as follows:
2004 2003 2002
%%%
Rate of increase in salaries 3.8 3.6 3.6
Rate of increase in pensions in payment 2.5 2.3 2.3
Rate of increase in deferred pensions 2.5 2.3 2.3
Rate of increase in career average beneÞts 2.5 2.3 2.8
Discount rate 5.7 5.5 5.8
Price inßation 2.5 2.3 2.3
The assets in the schemes and the expected rates of return were:
2004 2003 2002
Long-term Long-term Long-term
rate of Market rate of Market rate of Market
expected value expected value expected value
return % £m return % £m return % £m
Equities 8.1 1,399 8.6 945 7.7 1,002
Bonds 5.7 445 5.5 386 5.8 433
Property 6.9 92 7.1 88 6.4 91
Other 3.8 43 3.8 87 4.4 48
Total market value of assets 1,979 1,506 1,574
Present value of schemes liabilities (2,653) (2,275) (1,758)
DeÞcit in the schemes (674) (769) (184)
Related deferred tax asset 202 229 57
Net pension liability (472) (540) (127)
2004 2003
£m £m
Group net assets
Net assets prior to pension adjustments 7,990 6,559
FRS 17 pension liability (472) (540)
7,518 6,019
SSAP 24 pension asset (12) (6)
Net assets after pension adjustments 7,506 6,013
Group reserves
ProÞt and loss reserve prior to pension adjustments 4,051 3,649
FRS 17 pension liability (472) (540)
3,579 3,109
SSAP 24 pension asset (12) (6)
ProÞt and loss reserve after pension adjustments 3,567 3,103